Wal-Mart

With a focus on warehouses and discount department stores, Wal-Mart is one of the top global retailers. With a current revenue of about $485 billion, it ranks first among the top 500 firms on the Fortune 500 list. Additionally, the business claims 11,695 locations throughout 28 nations, providing it with global coverage. Additionally, the company reportedly employs 2.3 million workers.
In its present state, the entity actively conducts commerce with the outside world. As a result, dangers and possibilities exist for Wal-Mart. Threats aim to harm the organization, whereas opportunities would propel it to greater heights of corporate success. Here, these outside variables are covered. Wal-Mart should exploit the vast Asian and European markets
The firm could benefit immensely from expanding to India and China. A wide global presence boosts the market reach, hence, increasing sales for the enterprise. Moreover, the corporation should consider expansion into developing nations. In fact, there exist a lot of untapped markets that Wal-Mart could benefit from greatly. After all, expansion leads to higher revenues and profitability index. Besides, it is possible given the retailer's high-growth economic condition, thus, the result will be highly effective (Nathaniel, 2017).
Formation of strategic alliances
Wal-Mart has an opportunity in seeking important business associations. Strategies such as acquisitions and mergers are considerable. A merger with competing businesses such as Costco Wholesale Group, a major competitor, could help secure Wal-Mart market. Moreover, the company could acquire smaller entities to enhance its market domination (Nathaniel, 2017).
Cost leadership strategy
Wal-Mart has the best cost strategy in retail industry because of its efficient supply chain management, operations and distribution strategies. Additionally, the firm has a high bargaining power and dictates the buying prices of its commodities. Due to this, Wal-Mart sells to its customers at lower prices that its competitors might not afford.(Kasi, 2016).
High brand equity
Wal-Mart's brand superiority is significant in winning competition. It has an advantage over its smaller rivals; hence, it consolidates its position as the best retailer in the world. In fact, many customers become loyal to the brand (Kasi, 2016).
Threats
Strong competition
Wal-Mart faces stiff competition from companies such as Amazon and Costco Group. Due to the need to produce low cost products, the firm is forced to move its operations overseas and compete with other retailers at low production costs (Nathaniel, 2017).
Political tension
Due to its global existence, Wal-Mart faces diverse political challenges in different countries. It is difficult to handle all the pressure, especially in the cases of political turmoil. Assets may be destroyed, market lost and business disrupted. Its impact is highly intense.
Threat of new entrants into the retail industry
While Wal-Mart is the biggest player in the retail industry, entry of other companies has reduced its market share. New firms can easily enter the market, given their convenience, location and specialty. The impact of new entrants is so significant that an entity must remain steadfast and aggressive to keep its market niche (Greenspan, 2017).
Online selling
Amazon, for instance, has adopted fully online marketing and selling of its products, unlike Wal-Mart, which depends on physical systems. Thus, competition has increased to Wal-Mart's undoing (Kasi, 2016).
External Factor Evaluation Matrix
External Factor Evaluation (EFE) Matrix
Company Name:
Key External Factors Weight Rating Weighted Score
Opportunities
1) Formation of strategic alliances
0.20  4  0.80 
2) Walmart should exploit the vast Asian and European markets 0.15  3  0.45 
3) Cost leadership strategy 0.10  2  0.20
 
4) High brand equity 0.05  1  0.05 
5)      
 
Threats
1) Strong competition
0.25  4  1.00
2) Political tension 0.10  3  0.30 
3) Threat of new entrants into the retail industry 0.10  3 0.60 
4) Online selling
0.05   2 0.10 
5)    
 
TOTAL: 1.00    3.50
References
Greenspan, R. (2017, Jab 8). Walmart: Five Forces Analysis (Porter's Model). Retrieved from Panmore Institute: http://panmore.com/walmart-five-forces-analysis-porters-model-case-study
Kasi, A. (2016, June 23). EFE MATRIX OF WAL-MART. Retrieved from mba tutorials: www.mba-tutorials.com/strategy/1649-efe-matrix-of-wal-mart.html
Nathaniel, S. (2017, January 16). Walmart SWOT Analysis & Recommendations. Retrieved from Panmore Institute: http://panmore.com/walmart-swot-analysis-recommendations-case-study